Transportation Technology and Gentrification: Evidence from the entry of Ridesharing Services

Abstract

 We analyze the staggered entry of ridesharing services across U.S. metropolitan areas, estimating its effect on spatial redistribution and real outcomes of households. By reducing the cost of personal transportation, ridesharing services incentivize the urban in-migration of higher income individuals, raising urban rents and housing prices by about 6 and 9 percent, respectively. The effect on incumbent residents is conditional on ex ante homeownership. For homeowners, there is small displacement and a decline in delinquency rates. For non-homeowners, displacement and delinquency rates increase 11 percent and 42 percent, respectively. Our study emphasizes how the provision of high-end transportation technologies can increase urban gentrification and exacerbate inequality.

Keywords: Consumer Finance, Gig economy, Gentrification, Household Finance, Mortgages, Residential real estate, Ridesharing services, Urbanization.

JEL Classification: O33, J23